Dispensation riddle: Joe the contractor

[Fred Bloggs]

Never been able to see the point of using a brolly to be honest. Seems a pointless excercise to me when you can run a Ltd Co, but there you go.

[PhilAtBFCA]

Umbrella Company

hiteshg,

Even if your Umbrella Company does not require you to keep receipts then you may well want to so that you can prove to HMRC that you have incurred the actual costs of the expenses you are claiming. Its in you interest as its your personal tax at stake.

I dont quite understand why you think they are "fooling you". If you are contracted to an agency you either have the choice of running your own business or using the services of an Umbrella Company. Either way you will have fees to pay to use services, and these can vary considerably per annum, but the lowest I would expect to pay would be arround £600 a year.

If you were PAYE with the agency then you may well find that the agency pays you a lesser rate to take account of holiday pay, statutory entitlements and the fact that they have to pay soemone to manage the payroll. You could forecast the actual difference by using this method.


Phil

[Svalbaard]

If you think you can do better than your umbrella then why the hell don't you just do it?

I can understand the points raised so far and can see the frustration when the Umbrella puts up it's costs by £10 per month with no visible change in service or processes to justify it. But...

I can accept the £70-80 per month charge as I simply can't be arsed with the hassle of running a Ltd. company and I can live with my takehome being the approximate 5% less annually than what I'd get if I was still Ltd. I can offload all of the accounting shennanigans to them and just get on with my life.

Regardless, having run a Ltd. in the distant past I'm pretty sure I'd be paying them more than the equivalent £900 or so per year by way of monthly retainer and year end accounts preparation. I also like the fact that at the end of the month, ALL of my money is accounted for, and I get a very large 65% of total billed paid into my bank - so I know exactly where I stand.

[hiteshg]

Never been able to see the point of using a brolly to be honest. Seems a pointless excercise to me when you can run a Ltd Co, but there you go.

Completly true. I thought i was alone who hates this brollies. They simply doent do anything but create lot of nocie. Infact most of the work softwares will do these days.

I wish if any umbrella would be honest and just charge for what they do..

[hiteshg]

hiteshg,

Even if your Umbrella Company does not require you to keep receipts then you may well want to so that you can prove to HMRC that you have incurred the actual costs of the expenses you are claiming. Its in you interest as its your personal tax at stake.

I dont quite understand why you think they are "fooling you". If you are contracted to an agency you either have the choice of running your own business or using the services of an Umbrella Company. Either way you will have fees to pay to use services, and these can vary considerably per annum, but the lowest I would expect to pay would be arround £600 a year.

If you were PAYE with the agency then you may well find that the agency pays you a lesser rate to take account of holiday pay, statutory entitlements and the fact that they have to pay soemone to manage the payroll. You could forecast the actual difference by using this method.


Phil

Hi Phil,

thanks for the detailed reply.

I agree with you. But isnt it thier responsibilty to check my expenses bills once and see its all allowed. More over when HMRC come back they should act as my first line of defense. Submitting my origial reciepts from thier reocrds. Incase something is really worng , then I would pitch in and save my ass. well I am paying them for that work.

see the dipensation section on wiki

600 / year is too much for the work umbrellas do.

Regards,
hitesh

[Fred Bloggs]

Completly true. I thought i was alone who hates this brollies. They simply doent do anything but create lot of nocie. Infact most of the work softwares will do these days.

I wish if any umbrella would be honest and just charge for what they do..

A significant % of the fees are to cover factoring the money between the client, the agency and you. They pay you every week, but they probably wait 3 to 4 months for the money from the end client. So that probably accounts for a substantial proportion of what they charge you. Once you are set up properly, the effort involved in running your own Ltd Co is minimal to be honest, it just isn't worth using a brolly IMO.

[hiteshg]

A significant % of the fees are to cover factoring the money between the client, the agency and you. They pay you every week, but they probably wait 3 to 4 months for the money from the end client. So that probably accounts for a substantial proportion of what they charge you. Once you are set up properly, the effort involved in running your own Ltd Co is minimal to be honest, it just isn't worth using a brolly IMO.

well, thats where my question comes from. I was running from brolly to brolly for two years, but then a met a friend of mine, who is running his ltd company for almost 200 pounds a year. its 1/10th of what I am spending. he does everything himself with the help of software. Thats why this question, why do they charge so much..?

factroing, dont think all umbrellas are doing it. My comany was asking me to wait till the moeny is cleard.

[NickNick]

WEll, part of the cost of the brolly is in employing people to do the work that you could do, you're paying for the convenience. If you don't like it, you could leave?

[hiteshg]

WEll, part of the cost of the brolly is in employing people to do the work that you could do, you're paying for the convenience. If you don't like it, you could leave?

Yep, that’s the point but no umbrella company charge is reflecting the fact that we are paying them for convenience.

If I cook a pizza myself it would cost me 2 ponds, I am happy to pay 4 pounds for convenience not 40 !!

[Fred Bloggs]

I think you're talking yourself into running a Ltd Co. Myself, I wouldn't do it any other way.